How will demand for state school places change if VAT on private school fees is introduced?

The Savills Blog

How will demand for state school places change if VAT on private school fees is introduced?

Good schooling has long been a key driver of demand across the housing markets of the UK with many families deciding to move home when their children are approaching primary school age, and the search for property around good schooling can be particularly competitive in some parts of the UK.

But the quality of the schools only makes up one part of the equation and the likelihood of children being offered a place at a nearby school also needs to be considered.

Generally, the North and South West of England sees a higher proportion of applicants receiving an offer from their first choice school. Meanwhile in London, the pressure on schools is intense. 

In April, 10% and 12% of applicants didn’t get into their first choice primary school in outer London and inner London, respectively. And 31% of pupils didn’t get an offer from their first choice secondary school in inner London, higher than the 29% across outer London and much more than the average of 17% across England as a whole.

We have also found a strong correlation between how many students received an offer from their first choice school and house prices, with places with lower house prices and the weakest long-term house price growth typically the places with the highest proportion of students getting into their first choice school.


Typically, areas with greater competition for state school places also tend to see a higher proportion of pupils in independent schools. Parents who are able to, likely look to private schooling when their child is not offered a place at their top choice state school.

Labour's plans to introduce VAT on private school fees could see more demand filtering into the state and grammar school systems which may in turn increase the house price premiums we already know are evident around high performing state schools.

This is likely to be most keenly felt in places with both a high proportion of pupils currently attending an independent school and the fiercest competition for state school places.

While the quality of a single favoured school is important to some, the availability of a variety of good state, independent, primary and secondary schools provides a wider range of options for parents. 

This is particularly true for those who may be concerned about whether their child will get a place, often supporting demand for homes beyond a single school catchment area.

 

Further information

Contact Trystan Lever or Poppy Heneghan-Pickard

 

Recommended articles